Significant Accounting Policies and Estimates

The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim financial information and with the instructions to Article
8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended
June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. The unaudited
condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2016 as filed on December 22, 2016.

Liquidity

The
Company has experienced significant losses and negative cash flows from operations in the past. Management has implemented a strategy
which included cost reduction efforts, consolidation of certain back office activities to gain efficiencies as well as identifying
strategic acquisitions, financed primarily through the issuance of preferred and common stock and convertible debt, to improve
the overall profitability and cash flows of the Company.

After
the close of business on March 31, 2017, the Company and its subsidiaries, as borrowers, entered into a Revolving Credit, Term
Loan and Security Agreement (the Credit Agreement) with PNC Bank, National Association (PNC), and
certain investment funds managed by MGG Investment Group LP (MGG). All funds were distributed on April 3, 2017 (the
Closing Date).

Under
the terms of the Credit Agreement, the Company may borrow up to $73,750,000 consisting of a four-year term loan in the principal
amount of $48,750,000 and revolving loans in a maximum amount up to the lesser of (i) $25,000,000 or (ii) an amount determined
pursuant to a borrowing base that is calculated based on the outstanding amount of the Companys eligible accounts receivable,
as described in the Credit Agreement. The loans under the Credit Agreement mature on March 31, 2021.

The
loans under the Credit Agreement will bear interest at rates at the Companys option of LIBOR rate plus 10% or PNCs
floating base rate plus 9%. At June 30, 2017, the interest rate of the Revolving Credit Facility was 13.25% and there was approximately
$9,900,000 available. At June 30, 2017, approximately $6,000,000 of the Revolving Credit facility was fixed for a three-month
period at an interest of approximately 11.3%. Although the Company was not in compliance with the financial covenants of this
loan, management was able to obtain a waiver for this period and expect to regain compliance before the end of the next quarter.
Management believes that the future cash flow from operations, cash on hand and the availability under the Revolving Credit
Facility will provide sufficient liquidity for the next 12 months.

Principles
of Consolidation

The
condensed unaudited consolidated financial statements include the accounts and transactions of the Company and its wholly-owned
subsidiaries. All inter-company accounts and transactions are eliminated in consolidation.

Estimates
and Assumptions

Management
makes estimates and assumptions that can affect the amounts of assets and liabilities reported as of the date of the consolidated
financial statements, as well as the amounts of reported revenues and expenses during the periods presented. Those estimates and
assumptions typically involve expectations about events to occur subsequent to the balance sheet date, and it is possible that
actual results could ultimately differ from the estimates. If differences were to occur in a subsequent period, the Company would
recognize those differences when they became known. Significant matters requiring the use of estimates and assumptions include,
but may not be limited to, deferred income tax valuation allowances, accounts receivable allowances, accounting for acquisitions,
and evaluation of impairment. Management believes that its estimates and assumptions are reasonable, based on information that
is available at the time they are made.

Revenue
Recognition

Direct
hire placement service revenues are recognized when applicants accept offers of employment, less a provision for estimated losses
due to applicants not remaining employed for the Company's guarantee period. Contract staffing service revenues are recognized
when services are rendered.

Falloffs
and refunds during the period are reflected in the unaudited condensed consolidated statements of operations as a reduction of
placement service revenues and were approximately $1,515,000 and $374,000 for the nine-month period ended June 30, 2017 and 2016
respectively. Expected future falloffs and refunds are reflected in the consolidated balance sheet as a reduction of accounts
receivable and were approximately $1,454,000 and $60,000 as of June 30, 2017 and September 30, 2016, respectively.

Cost
of Contract Staffing Services

The
cost of contract services includes the wages and the related payroll taxes and employee benefits of the Company's employees while
they work on contract assignments.

Cash
and Cash Equivalents

Highly
liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. At June 30, 2017
and September 30, 2016, there were no cash equivalents. The Company maintains deposits in financial institutions in excess of
amounts guaranteed by the Federal Deposit Insurance Corporation. Cash and cash equivalents are maintained at financial institutions
and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances.

Accounts
Receivable

The
Company extends credit to its various customers based on evaluation of the customer's financial condition and ability to pay the
Company in accordance with the payment terms. An allowance for placement fall-offs is recorded, as a reduction of revenues, for
estimated losses due to applicants not remaining employed for the Company's guarantee period. An allowance for doubtful accounts
is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances
together reflect management's estimate of the potential losses inherent in the accounts receivable balances, based on historical
loss statistics and known factors impacting its customers. The nature of the contract service business, where companies are dependent
on employees for the production cycle allows for a small accounts receivable allowance. Based on management's review of accounts
receivable, an allowance for doubtful accounts of approximately $1,915,000 is considered necessary as of June 30, 2017 and $191,000
at September 30, 2016, respectively. The Company charges uncollectible accounts against the allowance once the invoices are deemed
unlikely to be collectible. The reserve includes the $1,454,000 and $60,000 reserve for permanent placement falloffs considered
necessary as of June 30, 2017 and September 30, 2016, respectively.

Property
and Equipment

Property
and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of
five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer
software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value
of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable.
If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written
down to the estimated fair value. There was no impairment of property and equipment for the nine-months ended June 30, 2017 and
2016.

Goodwill

Goodwill
represents the excess of cost over the fair value of the net assets acquired in the various acquisitions. The Company assesses
goodwill for impairment at least annually. Testing goodwill for impairment allows the Company to first assess qualitative
factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not
that the fair value of a reporting unit is less than its carrying amount. If the entity determines that this threshold is not
met, then performing the two-step impairment test is unnecessary. An impairment loss would be recognized to the extent the carrying
value of goodwill exceeds its implied fair value.

Fair
Value Measurement

The
Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair
value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between
market participants at the measurement date.

The
standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes
the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs
that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent
of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy
is described below:

Level
1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair
value hierarchy gives the highest priority to Level 1 inputs.

Level
2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level
3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority
to Level 3 inputs.

The
fair value of the Company's current assets and current liabilities approximate their carrying values due to their short term nature.
The carrying value of the Company's long-term liabilities represents their fair value based on level 3 inputs, as further discussed
in notes 7 and 9. The Company's goodwill and other intangible assets are measured at fair value on a non-recurring basis using
level 3 inputs.

Earnings
and Loss per Share

Basic
loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding
for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive
common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of
notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered
anti-dilutive and thus are excluded from the calculation. There were approximately 10,111,000 and 3,743,000 of common
stock equivalents excluded for the three and nine months ended June 30, 2017 (which include common share equivalents of preferred
stock, convertible debt, warrants and options) because their effect is anti-dilutive, respectively. Common share equivalents of
approximately 575,000 and 484,000 were included in the computation of diluted earnings per share for the nine months and three
months ended June 30, 2016, respectively. There were approximately 392,000 and 428,000 of common stock equivalents excluded
for the three and nine months ended June 30, 2016, respectively because their effect is anti-dilutive.

Advertising
Expenses

Most
of the Company's advertising expense budget is used to support the Company's business. Most of the advertisements are in print
or internet media, with expenses recorded as they are incurred. For the three and nine months ended June 30, 2017 and 2016, included
in selling, general and administrative expenses was advertising expense totaling approximately $588,000 and $1,092,000, and approximately
$233,000 and $781,000, respectively.

Intangible
Assets

Customer
lists, non-compete agreements, customer relationships, management agreements and trade names were recorded at their estimated
fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using
both accelerated and straight-line methods.

Impairment
of Long-lived Assets

The
Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate
that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining
lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value,
which is typically calculated using the discounted cash flow method. The Company did not record any impairment during the nine
months ended June 30, 2017 and 2016.

Stock-Based
Compensation

The
Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation
expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial
statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the
Black-Scholes-Merton ("Black-Scholes") pricing model. For all employee stock options, we recognize expense over the
requisite service period on an accelerated basis over the employee's requisite service period (generally the vesting period of
the equity grant). The Company's option pricing model requires the input of highly subjective assumptions, including the expected
stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact
stock-based compensation expense.

Options
awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards
in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model.

Upon
the exercise of options, it is the Company's policy to issue new shares rather than utilizing treasury shares.

Income
Taxes

We
record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset
and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences
of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss
and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply
to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a
valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized.

Due
to the private sale of shares of common stock to LEED HR during fiscal 2012 and the resulting change in control, the Company may
be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future
years.

Due
to the issuance of convertible preferred shares related to the Scribe and SNI acquisitions, the Company may be limited by Section
382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years.

We
recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will
be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that
we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters
will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing
of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the
amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made
and could have a material impact on our financial condition and operating results.

Reclassification

Certain
reclassifications have been made to the financial statements as of and for the three and nine months ended June 30, 2016 to conform
to the current year presentation. There is no effect on assets, liabilities, equity or net income.

Segment
Data

The
Company provides the following distinctive services: (a) direct hire placement services, (b) temporary professional services staffing
in the fields of information technology, engineering, medical, and accounting, and (c) temporary light industrial staffing. These
distinct services can be divided into two reportable segments, Industrial Staffing Services and Professional Staffing Services.
Selling, general and administrative expenses are not completely separately allocated among light industrial services and professional
staffing services. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources
to be allocated to the segment and to assess its performance. Other factors, including type of business, type of employee, length
of employment and revenue recognition are considered in determining these operating segments.